Low cost carrier easyJet said its seasonal losses from October to March will be less than first thought after the airline received a boost from lower oil prices and a recent tumble in the euro.

EasyJet now predicts a first-half loss of as little as £5million, adding that a profit as high as £10million is also possible. In January, it had projected a loss for the period in the range of £10-30million, It lost £53million at the same stage last year.

The discount airline also said in its latest trading update that revenue per seat in its first half should now rise 2.5 per cent, up from a forecast of 2 per cent in its January update, largely driven by lower fuel costs.

On the up: easyJet chief executive, Carolyn McCall, said teh low-cost airline was well positioned to deliver sustainable returns to shareholders

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The airline said the impact of exchange rate movements would boost its bottom line by £20million in its first half. Analysts explained that the weaker euro meant the airline was paying European airports less for using their facilities, including landing slots.

But the company warned that currency gains will be reversed over the course of the year, leading to a full-year foreign exchange loss of £20million as Europeans book their summer flights in euros.

Richard Hunter, head of equities at Hargreaves Lansdowne, said: 'I think there may also be an element of Europeans booking abroad to come here - in other words paying in euros.'

'That could explain why the expected figure is much worse in the second half of the year (negative) when they are most busy - earning more in euros which translates to less pounds when converted.'

Shining bright: The airline also said the impact of exchange rate movements would boost its bottom line by £20million for the fist half

But the strong update was not celebrated by investors who instead focused on a spike in the price of oil today on supply concerns following air strikes by Saudi Arabia on rebel targets in Yemen. The action sent Brent crude shooting up 5 per cent to just under $60 a barrel.

In lunchtime trading, easyJet shares on the FTSE 100 index were 4 per cent, or 9p, at 1,811p. Shares in British Airways-owner IAG were also lower, down 27.5p at 580.0p.

However Richard Hunter said: 'EasyJet continues to be a compelling proposition for both customers and investors alike, with an improved profit guidance figure providing some solace in the currently volatile environment'.

Meanwhile fellow budget airline Wizz Air - which recently floated on the London Stock Exchange - said today that it expects its revenue and profit in the financial year to end-March to be in line with its own expectations after it 'traded well' through the fourth quarter,

Wizz Air also said it would restructure its Ukrainian operations in response to the crisis in the country.

The Hungarian low-cost carrier will now base just one Airbus A320 aircraft in Kiev. The second Airbus A320 currently based there will be redeployed to Kosice in Slovakia, operating new routes to Milan Bergamo and Sheffield-Doncaster in early June. It will discontinue its Wizz Air Ukraine Airlines subsidiary.

The company said: 'The restructuring of the group's Ukrainian operations and the closure of Wizz Air Ukraine will not have a material effect on the group's trading in the current year and subsequent financial years.'

However, Wizz Air shares were also lower today, down 23p at 1,327p on the increase in fuel costs. But the stock remains well above its offer price of 1,150p having soared since its flotation on February 25.